$80K of high-interest debt wiped out with a refinance — ~$1,900/mo of cashflow freed

The client's revolving balances had crept up to roughly $80,000 at rates between 19% and 22%. Minimum payments alone were close to $2,400 a month and barely touching principal — a treadmill that gets worse, not better, over time.

Their bank had offered only a modest line-of-credit increase, which would have layered more variable debt on top rather than solving the structure.

With a home worth about $850,000, there was room to refinance up to the 80% loan-to-value limit ($680,000). We refinanced the existing $420,000 mortgage and pulled the additional $80,000 to clear every high-interest balance in one move.

We modelled the trade-off honestly: yes, spreading $80,000 over a mortgage amortization has a long-run interest cost, but at 5.49% versus 20%+ the monthly relief was dramatic — and we paired the refinance with a plan to apply the freed cashflow as prepayments so the consolidated balance is gone faster than the amortization implies.

Replacing roughly $2,400/month of minimum payments with about $490/month of additional mortgage payment freed close to $1,900 a month. We showed the client the amortization cost up front so the decision was made with eyes open — and built a prepayment plan to neutralize it.